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Archive for 2015

CLIENT PROFILE
Vancouver-based couple owns multiple businesses and holding companies but needs advice on restructuring, as well as guidance on long-term estate and financial planning.

THE SITUATION
Vancouverites Teresa Lin and Lyla Wong* (45 and 47, respectively) have started a series of businesses in the 20 years they’ve been together. And, because they’re not always related businesses (their empire spans everything from import/export to software development and specialty retail), they have a series of holding and operating companies grouping business lines that are, at least, similar.

INVESTING FOR RETIREMENTIB: For retirement, I like to have multiple sources of income for clients, rather than just saying everything is going to be saved in the holdco.

There still should be an RRSP, a TFSA, and other investment accounts that are completely removed from their business operations in case there’s a scorched-earth-type scenario with the business. Say one of them gets a disability and her involvement in the business was required to maintain its value: I would want to have some of their wealth removed from the business beforehand.

Still, given most of their revenue is generated within companies, it wouldn’t make sense to be drawing $1 million in salary a year. They would probably keep it within the corporate structure to maintain tax deferral. Click here to read the rest of the article.

For so many seniors, retirement is the time to kick back and relax after decades of all their hard work. Travel, time with family, golf: it’s a life of leisure – at least, that’s the dream.

In fact, money is a major concern for today’s retirees. Nearly 60 per cent of retired Canadians are carrying some form of debt, according to a CIBC poll. Although retired Canadians hold less debt than those still working, they’re also less likely to be taking steps to accelerate their debt repayment.

Without a regular paycheque coming in, it is more important for people to live within their means. The good news is that wit a little legwork, people can enter their golden years in the most fiscally stable position.

The top questions Vancouver fee-only financial advisor Ngoc Day gets from senior clients are: Will we outlive our money? And can we afford to maintain the same lifestyle we’re used to?

“You have prioritize your objectives,” says Ms. Day, who’s with Macdonald, Shymko & Company Ltd. “Being aware of what you’re spending, and what your spending patterns are will help you decide if you need to forgo something to reduce expenses. That can’t happen if you haven’t got a clear budget or a clear idea of what you’re spending it on.” Click here to read the rest of the article.

Of all the places in Canada to retire, B.C.’s Salt Spring Island ranks right up there in terms of desirability. Beth and Patrick Mitchell chose the Southern Gulf Island for its active arts community, vibrant food culture, decent weather and numerous services, including a small hospital. The former Vancouver residents couldn’t be happier. They just hope they have enough money to last them until they have both drawn their last breath.

“We’ve been here for about six months, and we absolutely love it,” says Ms. Mitchell, 68, a former adult educator. “We were ready for less city and more of what we loved most about the quiet, simplicity and social intimacy of island life.”

The couple took their retirement planning very seriously. In the years leading up to their retirement, they read books, attended seminars, crunched numbers and sought professional advice from a fee-only financial planner. Now that they’re living the dream, the two have realized that financial planning doesn’t end once you’ve left your desk for good.

Fee-only financial adviser, Ngoc Day, with Macdonald, Shymko & Co. Ltd. in Vancouver, says retirees need to determine their priorities, especially if they have every intention of retaining their preretirement lifestyle. Click here to read the rest of the article.

Since their original Financial Facelift in 2009, Ezra and Leah have done well indeed. Back then, they were a young couple with a child, struggling to pay down debts and feeling constrained by their tight budget. Today, Ezra is part-owner of the family company.

“The planner’s advice reassured us that we were doing the right things,” Ezra says. The planner, Ngoc Day of Macdonald, Shymko & Co. Ltd. in Vancouver, offered some tips on freeing up cash flow. “It also convinced us that enjoying life a bit wasn’t a bad thing as long as we maintained a balance.”

Today, Ezra, 33, and Leah, 32, have three children with a fourth on the way. Rather than doing without, they’re planning to build a new house and wondering how to invest their surplus income. Click here to read the rest of the article.

Gina Macdonald finished a degree in psychology before pursuing a career as a fee-only financial adviser and portfolio manager. That social-sciences background has proved useful: Ms. Macdonald often finds herself helping clients manage their emotions as much as their portfolio holdings.

Among the “cognitive errors” she encounters are overconfidence and hindsight bias, which can make an investor believe that a past event was more predictable than it actually was. Another is regret avoidance – where investors refuse to admit to themselves that they’ve made a poor investment choice so they don’t have to deal with the unsettling emotions that the decision brings up.

All can affect an investor’s success.

“When I first started in this field, a lot of people thought psychology had nothing to do with financial planning,” says Ms. Macdonald, who is a principal at Vancouver’s Macdonald Shymko and Co. Ltd. “Now people have become more evolved and know that money has a lot of psychology to it. Click here to read the rest of the article.